Pension Scam Reporting and Recovery: What to Do If You've Been Targeted

Pension fraud is one of the most devastating forms of financial crime. Victims — many of whom are in their fifties or sixties and have spent decades accumulating their pension savings — can lose their entire retirement fund in a single transaction. Recovering lost pension money is difficult and often impossible once the funds have been disbursed, but prompt action, correct reporting, and in some cases legal or ombudsman redress can help. This guide explains what to do if you believe you have been the victim of a pension scam, or if you are considering a transfer that may involve an element of fraud.

The scale of the problem

The Pension Scams Industry Group (PSIG), Action Fraud, and the FCA have all documented significant and growing losses from pension fraud. Average losses per victim can exceed £50,000, and in some cases individuals have lost six-figure sums. The FCA estimates that tens of thousands of people are approached by pension fraudsters each year; only a fraction report it.

Expats are particularly vulnerable to certain types of pension scam because:

• They may be less aware of current UK regulatory rules
• The incentive to access a UK pension early (to fund life abroad) makes early access offers more tempting
• Distance from UK advisers and regulators makes the verification of claims more difficult
• Some fraudsters specifically target expat communities, using social media and referral networks

Common types of pension scam

Pension liberation fraud: Also called "pension unlocking," this involves a promoter offering to access your pension before age 55 (57 from 2028), typically using a loan arrangement or liberation scheme. The funds are transferred to an unregistered scheme; you may never see the money. You also face an HMRC tax bill — an unauthorised payment charge of 40%, plus a further 15% surcharge where the unauthorised payments reach 25% or more of the fund in a year, giving a combined charge of up to 55% of the sum released.

Bogus investment schemes: The pension is transferred to a SIPP, which then invests in high-return "alternative investments" — hotel rooms, storage units, film partnerships, carbon credits, or overseas property — that turn out to be illiquid, overvalued, or fraudulent. The fund is depleted; the promoters disappear.

Cold call scams: Fraudsters contact individuals (often via cold call, now illegal in the UK for pension purposes) offering free pension reviews, guaranteed returns, or exclusive investment opportunities. Legitimate pension advisers do not cold call.

Cloned firms: Fraudsters create websites and documentation mimicking legitimate FCA-regulated firms, using similar names, addresses, and even FCA registration numbers. Individuals who believe they are dealing with an authorised firm are not.

International QROPS fraud: Some scams involve bogus or non-qualifying overseas pension schemes. A "QROPS" transfer is promised; in practice, the receiving scheme is unregistered, and the funds are lost, often triggering HMRC's overseas transfer charge on top.

Immediate steps if you suspect fraud

1. Do not transfer any further funds. If you are mid-process in a transaction that seems suspicious, halt it immediately. Contact your current pension provider and instruct them to freeze any pending transfer.

2. Gather all documentation. Collect every email, letter, telephone call record, contract, and promotional material related to the suspected fraud. This evidence will be needed for any report or claim.

3. Do not contact the suspected fraudster. Alerting them may cause them to destroy records or move funds further beyond reach.

4. Contact your bank or transfer recipient if funds have moved. If money has just been transferred, contact your bank's fraud team immediately — some transfers can be recalled within hours or days. Where an authorised push payment (APP) scam is involved, the Payment Systems Regulator's mandatory reimbursement scheme (in force from 7 October 2024) requires the sending and receiving payment firms to consider reimbursement of eligible victims, up to a per-claim maximum, with the cost split equally between the two firms. Note that disputes over whether a pension transfer was an "APP scam" can be complex, so report promptly.

Who to report to

Action Fraud (www.actionfraud.police.uk): The national fraud and cybercrime reporting centre in England, Wales, and Northern Ireland. You can report online or by phone (0300 123 2040). Action Fraud logs cases and passes them to the National Fraud Intelligence Bureau. Reports to Action Fraud do not themselves trigger individual investigation, but they contribute to intelligence that leads to enforcement action.

The Financial Conduct Authority (FCA) (www.fca.org.uk/consumers/report-scam): Report the firm or individual via the FCA's online reporting system. If the firm or individual was conducting regulated activity without authorisation, the FCA may be able to take enforcement action. The FCA also maintains a warning list of known scam firms.

The Pensions Regulator (TPR): If the fraud involved a workplace pension scheme or a QROPS arrangement, TPR may be the appropriate regulator. TPR can investigate and act against trustees and scheme operators.

HMRC: If you have been a victim of pension liberation fraud, HMRC may be pursuing you for an unauthorised payment charge even though you did not knowingly participate in a fraud. Contact HMRC as soon as possible to explain the circumstances. HMRC has procedures for handling fraud victims and may exercise discretion in some cases — though it cannot guarantee that the charge will be waived.

The police: Serious pension fraud may also be a matter for the police, particularly if the perpetrators are known. Report serious fraud to Action Fraud or directly to your local police if the crime is recent and there is a chance of arrest.

Financial Services Compensation Scheme (FSCS)

The FSCS provides compensation of up to £85,000 per person per institution where a regulated firm that was authorised by the FCA goes out of business or is unable to pay claims. This can be relevant where:

• You received negligent advice from an FCA-authorised adviser recommending an unsuitable transfer or investment
• The adviser has since failed or been insolvent
• The losses resulted from the regulated firm's conduct

The FSCS covers "bad advice" losses from authorised advisers who are no longer able to pay claims. It does not cover losses from unregulated firms that were never authorised.

Claims to the FSCS are made online at www.fscs.org.uk. The FSCS may pursue recovery from the firm or its principals on your behalf.

The Financial Ombudsman Service (FOS)

If you received bad advice or inappropriate service from an FCA-authorised firm that is still operating, you may be able to complain to the Financial Ombudsman Service. For complaints referred on or after 1 April 2026 about acts or omissions on or after 1 April 2019, the FOS can make a binding award of up to £455,000 for financial loss caused by poor advice or mis-selling (a lower limit of £205,000 applies to acts or omissions before 1 April 2019). These limits are uprated each April in line with CPI.

Before going to the FOS, you must first complain directly to the firm and allow eight weeks for a response. If you are dissatisfied with the response, you can escalate to the FOS.

The Pension Ombudsman

If the complaint relates to the conduct of a pension scheme itself — for example, a trustee's decision that caused loss, or maladministration by the scheme — the Pensions Ombudsman is the relevant body. The Pensions Ombudsman is separate from the Financial Ombudsman and has different jurisdiction.

Legal remedies

In some cases, pension fraud victims pursue civil legal action against fraudsters, promoters, or complicit advisers. This can be expensive and difficult, particularly if the perpetrators are overseas or have dissipated the assets. However, civil recovery has succeeded in some cases, particularly where the promoters remain identifiable and have traceable assets.

Legal action against SIPP providers who failed to carry out adequate due diligence before accepting suspicious transfers has also been pursued — with mixed results.

Protecting yourself going forward

• Check all firms you deal with on the FCA Register (register.fca.org.uk) before proceeding
• Never accept unsolicited approaches about your pension — hang up on cold callers
• Be extremely wary of "guaranteed returns," early access offers, or unusual investment strategies
• Always take independent regulated advice from a firm you have independently verified
• If an offer seems too good to be true, it is

Seek help immediately

If you believe you have been a victim, time matters. This guide provides an overview of reporting routes and recovery mechanisms as of 2026 but does not constitute legal or financial advice. Contact regulated advisers, the appropriate regulators, and where necessary legal counsel as soon as possible.

How Global Investments Can Help

If you are concerned about a pension arrangement that does not seem right — an investment you were persuaded to make, a transfer that was recommended under pressure, or a scheme that has stopped communicating — Global Investments can provide an independent assessment of your situation. We work with clients who have been caught in unsuitable or fraudulent arrangements and can help you understand your options and identify the appropriate reporting and recovery routes. Contact us in confidence.